Sales Reports

KNH Enterprises

January 1, 2005

Location: Taipei, Taiwan

Sales: $65 Million

Description: Key Personnel
J.C. Tai, president and owner; Dr. Kirk Hwang, vice president corporate planning and international operations; George Wong, hygiene business director; Herman Tai, industrial specialties business director; Alvin Hu, technical vice president

Taipei, Taiwan; Shanghai, China

ISO Status
ISO 9001 certified

Air through bonding, thermal bonding, meltblown, airlaid, needlepunching

Brand Names
Carnation brand used for hygiene; Co-Fiber for industrial specialty products

Major Markets
Hygiene, industrial, agriculture, geotextiles

KNH, Taiwan’s largest nonwovens producer, continued its efforts to diversify its roll goods business beyond the commodity-oriented hygiene market last year and executives said these efforts have paid off. The company reported 30% overall growth levels and a 20% jump in nonwovens sales thanks largely to growth in Asia, particularly China.
“China is a virgin market,” said company president and owner J.C. Tai. “It’s really growing fast but now it just needs to prove that it can maintain its stability,”
An active member of ANFA, the Asian Nonwoven Fabrics Association, Mr. Tai said efforts are underway in the region to integrate and modernize the Asian nonwovens industry, which has traditionally been very fragmented. These efforts are intended to facilitate conducting business in the region.”
With a reported 85% of its sales generated in Asia, KNH has a strong interest in improving the industry there. One area of increasing interest to the company is wastewater treatment. As Asian countries look toward modernization, they are trying to clean up heavily polluted water supplies and the properties of nonwovens, such as absorbency and tremendous surface area, allow them to help clean this water.
Efforts in this area have led to the creation a meltblown/needlepunch/spunbond composite membrane for wastewater treatment applications. The material forms the filtration media in products that use bacteria to convert debris in wastewater to carbon dioxide and water.
This product has built off of advancements made by KNH in water filtration, which has emerged as a big market for the company as advancements in the company’s meltblown nonwovens have opened up doors in water management. This is particularly an important market in China as more consumers and agencies become more aware of the importance of water quality. Mr. Tai said he expects similar trends in air quality control to follow.
On the converting side of its business, KNH has doubled its wipes capacity in the past year because of that market’s huge growth potential. “The wipes market in Asia is just like the market in the U.S.,” Mr. Tai said. “Consumers are looking for convenience and we are responding to it.”
In other expansion news, the company has added its second airlaid line as well as its first spunlaced line to its nonwovens operation. While materials made on these lines will target hygiene and wipes markets, KNH is also exploring industrial specialty areas for this output. “The commodity markets can be dangerous,” Mr. Tai explained. “That’s why we are looking more into environmental and industrial specialty areas.”
Still, hygiene products continue to be an important market for KNH, which sells products under the Carnation brand name, in its consumer division. Here, the challenge is to focus on cost improvements and performance enhancements to drive up earnings, improve cost controls and woo customers.
This goal has been achieved to some extent with a new film/nonwovens line, which came onstream in 2004, producing polyethylene/nonwoven laminates for hygiene applications. Among the features of this new line, which improves cost efficiency, is a print release coating option. This gives customers more choices in products.
Other efforts within the hygiene segment include decreased weights in KNH’s carded nonwovens. The result has been lower costs, which have helped KNH defend itself against pricing pressures. The company has engineered its materials to provide the same sponginess at 25 gpsm weights as it did at 30 gsm. This trend is also ongoing in the airlaid market, another market in which KNH participates that has been characterized by pricing pressures in recent years. The company has been fine-tuning its two-in-one airlaid product, sold in the feminine hygiene market under the Carnation brand, to increase performance while decreasing basis weights. Executives feel that this practice will continue as prices trend even lower in upcoming years.
Meanwhile, on the raw material front, KNH has been combating fluctuating raw material prices in the synthetic realm by paying more attention to cotton and other natural fibers. “As oil prices rise, the price of cotton doesn’t seem so high,” Mr. Tai explained. “We are seeing the direction of the nonwovens industry in general going toward natural fibers because synthetics are so dependent on petroleum.”"